People’s Bank of China Stresses on Global Regulation for Crypto and DeFi Markets

cryptonews.com:

China’s central bank has called on global financial authorities to regulate the digital asset and decentralized finance (DeFi) markets in its recent financial stability report. 

The People’s Bank of China released a report on Dec 22 highlighting a regulatory pathway for local and international financial watchdogs to roll out new rules, and policies in a bid to protect investors and all stakeholders in the market. 

According to the report, virtual assets account for 1% of the world’s entire financial market with a limited relationship with traditional finance, analysts wrote while seeking a global approach to stability. 

However, several commentators have opined that traditional finance will get more exposed to digital assets in the coming years as more products become mainstream in finance. A notable example is the tokenization of real-world assets currently spearheaded by large financial institutions deploying blockchains as technical solutions. 

Also, the inflow of institutional investors in the market through wealth managers and digital asset funds is a major sign of a strong future partnership between both players. 

A major driver for instructional investors in traditional finance in recent times is the anticipation of a spot Bitcoin ETF approval by the United States Securities and Exchange Commission (SEC) which will be a new window for traditional finance funds to flow into DeFi markets creating a bee cycle. 

Blockchain reporter Colin Wu wrote on X (formerly Twitter) about the latest report highlighting the first time there was a separate section for the digital asset market. 

The latest financial stability report of the People's Bank of China, for the first time, has set up a separate "crypto-assets" section in a large